SET-Plan Ocean Energy - Implementation Plan · 1 SET-Plan Ocean Energy - Implementation Plan Final...

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SET-Plan

Ocean Energy - Implementation Plan

Final

21 March 2018

adopted by SET-plan steering committee

Prepared by Temporary Working Group Ocean Energy

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................. 4

INTRODUCTION .............................................................................................................. 6

OCEAN ENERGY – THE EUROPEAN OPPORTUNITY ............................................... 8

1.1. THE VISION OF THE OCEAN ENERGY IMPLEMENTATION PLAN ........ 9

1.2. ANALYSIS OF EXISTING ACTIONS AT MEMBER STATES AND

REGIONAL LEVEL ......................................................................................... 9

ANALYSIS OF OCEAN ENERGY PROJECTS IN THE CONTEXT OF THE SET-

PLAN OCEAN ENERGY TWG .............................................................................. 12

THE ACTIONS TO BE MONITORED UNDER THIS IMPLEMENTATION PLAN .. 18

ANNEX 1: STAKEHOLDERS AND COUNTRIES INVOLVED IN THE PROCESS . 22

a) Composition of the Temporary Working Group ............................................. 22

ANNEX 2: OUTPUTS FROM STRATEGIC ROADMAP ............................................. 23

ANNEX 3: FINANCING/FUNDING SOURCES ........................................................... 24

ANNEX 4: OCEAN ENERGY ........................................................................................ 26

ANNEX 5: WIDER POLICY CONTEXT ....................................................................... 27

ANNEX 6: THE WORK OF THE OCEAN ENERGY TEMPORARY WORKING

GROUP ..................................................................................................................... 29

a) THE TWG PROCESS..................................................................................... 29

b) THE OCEAN ENERGY STRATEGIC ROADMAP ..................................... 29

c) THE EUROPEAN TECHNOLOGY AND INNOVATION PLATFORM FOR

OCEAN ENERGY .......................................................................................... 30

ANNEX 7: ACTIONS FICHES ....................................................................................... 31

STRATEGIC ENERGY TECHNOLOGY PLAN TECHNOLOGY DEVELOPMENT ACTIONS ................................................................................................................................... 31

SECTION 1 - TECHNICAL ACTIONS .......................................................................... 31

Action 1.1 Tidal Energy technology device development and knowledge

building up to TRL6...................................................................................... 31

Action 1.2 Tidal energy system demonstration in operational environment

(TRL 7-9) ........................................................................................................ 33

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Action 1.4 Wave energy system demonstration and deployment TRL 7-9 34

Action 1.5 Installation, logistics and infrastructure ..................................... 37

SECTION 2 - FINANCE ACTIONS ................................................................................ 40

Action 2.1 Creation of an investment fund for ocean energy farms ......... 40

Action 2.2 Creation of an EU insurance and guarantee fund to underwrite

various project risks. .................................................................................. 42

Action 2.3 Wave Energy Europe Pre Commercial Procurement (PCP) action

for development of wave energy technology. ....................................... 44

SECTION 3 – ENVIRONMENT ACTIONS ................................................................... 45

Action 3.1 Development of certification and standards to support the

offshore renewable technology sector. .................................................. 45

Action 3.2 De-risking environmental consenting through an integrated

programme of measures ............................................................................ 47

ANNEX 8 -HIGH LEVEL BREAKDOWN OF FUNDING ESTIMATES .................... 50

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EXECUTIVE SUMMARY

The Set Plan Temporary Working Group (TWG) was formed in 2017 with the task of developing

this implementation plan. The Group recognises the significant opportunity for ocean energy

technologies to provide sufficient renewable energy supply to meet the demands of the future.

This plan however focuses on the challenges for wave and tidal and the ambition of the plan is to

outline a structured approach that will enable both of these technologies to follow a development

path with the ultimate destination of a commercially viable wave and tidal industry. The

indicative timescale and ambition developed in the Declaration of Intent is for this to happen for

tidal by 2025 and for wave by 2030. Given the length of time that the industry has been in

development, the TWG recognises that this is not a long time and significant work and supports

are required if these timelines are to be met. It is not just about development of technologies but

the development of a new industrial sector with large scale manufacturing and deployment supply

chains developed that will enable the economies of scale required to meet the commercialisation

target.

Co-ordination between MS and EC to date has been in the development of research and roadmaps

which have set out the aspiration of Wave and Tidal Sector. The principle of this plan is to turn

those aspirations into operational actions.

This plan outlines three high level actions

1. Co-ordination between Member States (MS) and Regions to share and track critical

information annually that will demonstrate the clear development of the ocean energy

technologies

2. Collaboration between MS, Regions and the European Commission to ensure the effective

use and appropriate blending if possible, of funds to drive large scale deployment.

3. The need for annual monitoring of progress with a progress review carried out at the end

of each phase to determine Go/No Go to the next phase.

a. Phase 1 (2018 -2020) – A feasibility DISCOVERY phase to develop

i. A collective monitoring approach by MS in 2018 and an agree oversight

management process for projects and funding which outlines achievable

interim commercialisation targets

ii. The likely levels of funding required for phase 2 and 3

b. Phase 2 (2020-2025) – Collaborative DEVELOPMENT Phase with operational

arrays demonstrating the ability to meet the technical and financial metrics

c. Phase 3 (2026-2030) – Commercialisation Scale DEPLOYMENT Phase to build

the sectors supports with large scale deployments that will drive costs to a

commercial level. After 2030 the ambition is that the sector DELIVERY will be at

scale via a commercial market with a functioning supply chain.

Note: The phase timescales are indicative and are proposed for planning purposes and it is

understood that tidal and wave will each progress at a different pace from each other. See

indicative phase timelines and activities on page 21.

Funding levels proposed in this plan: It should be noted that through this plan, the TWG has

only provided an estimate of the funding required for the phases mentioned above. The current

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estimate is for funding levels totalling 1.2BN EUR between 2018 and 2030The breakdowns are

outlined in the Action Fiches in Appendix 7.

To ensure their proper implementation, an estimated overall investment of EUR 1.2 BN shall be

required to be mobilised, and a provisional estimate of contributions is as follows:

EUR 409.5 million coming from the industry (private funds - 33% of the total);

EUR 421.5 million coming from national/regional programmes - (34% of the total);

EUR 411.5 million coming from EU funds (33% of the total – mainly from Horizon 2020

and a minor part form InnovFin EDP)”

Note – a table showing a high level breakdown of the total funding requirements is

contained in Annex 8 and these figures are initial estimates and will need to be investigated,

validated and agreed over the life of this Implementation plan.

It will be a key part of the annual oversight process to refine these estimates and to determine

how to maximise the benefit of the funding streams provided across the member States, regions

and the EC and to determine opportunities for blending or pooling funding sources. While it is

understood from previous analysis that a significant level of investment is required for the sector,

it is estimated that an investment of circa 1BN EUR in the SET Plan [wave and tidal industries]

would result in a net benefit to Europe due to the creation of a new industry, which would profit

from activity both within Europe and internationally1.

1 The benefits of such an investment can be measured in terms of Gross Value Added (GVA) and job creation. As an example recent UK study

undertaken by the University of Edinburgh and the Offshore Renewable Energy Catapult forecasted that, provided the wave and tidal industries could reach cost parity with offshore wind industry by 2030, an investment of circa £1bn in the wave and tidal industries at that time could return

a GVA to the UK of approximately £5bn. Further to this, the same study presented how such an investment in 2030 would be the first stepping

stone in a path to achieving greater returns on investment further down the line; by 2040, a potential investment of £5bn could result in a GVA of around £30bn and by 2040 and investments of £15bn by 2050 could result in a GVA of circa £140bn. It is expected that these returns on

investment, seen in a member state, could be replicated at a European level.

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INTRODUCTION

The clean energy transition represents an important opportunity for Europe. We have the

potential to create entirely new industries creating significant employment. However, to achieve

this, Europe must lead this transition, and not simply adapt to it.2

This can only be achieved via close cooperation between the European Union, Member States,

regions, industry and researchers.

In this context invited stakeholders and SET Plan countries3 reached an agreement on common

targets specifically for the ocean energy sector. These are:

1. to bring ocean energy to commercial deployment,

2. to drive down the levelised cost of energy (LCoE),

3. to maintain and grow Europe’s leading position in ocean energy and

4. to strengthen the European industrial technology base, thereby creating economic growth

and jobs in Europe and allowing Europe to compete on a global stage.

For the levelised cost of energy (LCoE) of tidal stream and wave energy, quantitative targets

were set:

The LCoE for tidal stream energy should be reduced to at least 15 ct€/kWh in 2025 and

10 ct€/kWh in 2030.

Wave energy technology should follow the same pathway through convergence in

technology development and reach at least the same cost targets maximum 5 years later

than tidal energy: 20 ct€/kWh in 2025, 15 ct€/kWh in 2030 and 10 ct€/kWh in 2035.4

However dramatic reductions in LCoE will have to be realised through a combination of

development and deployment to ramp up ‘learning by doing’ and learning by innovation A

combination of both step changes in technology performance combined with mass production

will deliver the required cost reduction and performance improvements of both wave and tidal

technology. Overall this temporary working group recognises that the combination of both step

changes in innovation and significant volumes of ocean energy generation devices must be

deployed to achieve these targets.

In order to achieve the development and deployment requirements outlined above there are also

different forms of financial supports required during the different phases. In the earlier phase,

there is a need for the “Technology Push” through mechanisms such as grants to stimulate the

technology development to pre or early commercial stage. At that stage in the development the

support will need to switch to more of a “Market Pull” and which incentivises wider scale

deployment, supply chain development and ultimately the LCOE reduction required for fully

commercial operations and ultimately the potential to compete with other forms of renewable

energy generation.

2 ‘Clean Energy for All Europeans – unlocking Europe's growth potential’, European Commission press release, Nov 2016

3 For more information on the SET Plan and the wider policy framework, see Annex 5.

4 The formal targets do not set explicit targets for the volume of deployed ocean energy capacity. However, LCoE is only indirectly a function of

time – capacity deployed is the real driver of lower costs. If the capacity is not deployed than time becomes irrelevant, as LCoE cannot be reduced.

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The ambition of the Implementation Plan’s actions is to ensure that in the technology

development phase is converging on sustainable technological solutions as fast as possible and

that in the large scale deployment phase that this occurs in a coordinated, safe, sustainable and

cost-effective manner in order to assist the industry to achieve the necessary LCoE targets.

BASIS FOR THE IMPLEMENTATION PLAN

The Implementation Plan was written by the ‘Temporary Working Group for Ocean Energy’

(TWG), which is comprised of 10 EU Member States, and chaired by. Stakeholders also joined

the TWG, represented by the relevant Government Agencies, Regional representatives, industry

sectors representatives, research associations and the education sector.5

The actions listed within the Implementation Plan is primarily based upon 2 key sources:

THE OCEAN ENERGY STRATEGIC ROADMAP

The Strategic Roadmap identifies a path forwards, building on European leadership in

ocean energy, and developing technologies that can meet a significant amount of Europe’s

power demand over the next 35 years. Main priority areas for technological progress are

identified in the roadmap, but also four key Action Plans focused on maximising private

and public investments in ocean energy development by de-risking technology as much as

possible.

The Strategic Roadmap is considered to be the ‘Declaration of Intent’ agreed by the EU

Commission, Regions, Member States, Stakeholders and the Ocean Energy Industry.

THE EUROPEAN TECHNOLOGY AND INNOVATION PLATFORM FOR OCEAN

ENERGY

The European Technology and Innovation Platform for Ocean Energy (ETIP Ocean) is funded by

the European Commission to define research and innovation priorities for the ocean energy sector

and promote solutions to the industry, European and national policy makers.

This network produced the Strategic Research Agenda for Ocean Energy. It identified essential

priority areas to be addressed to improve ocean energy technology and decrease its risk profile,

and formed the basis for the Strategic Roadmap.6

5 See Annex 6 for more information on the Ocean Energy Temporary Working Group

6 See Annex 6 for more information on both sources

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OCEAN ENERGY – THE EUROPEAN OPPORTUNITY

Ocean energy is abundant, geographically diverse and renewable. Under favourable regulatory

and economic conditions, ocean energy could meet 10 % of the European Union’s (EU) power

demand by 2050. Europe’s seas and oceans could therefore play an important role in addressing

one of the EU’s biggest current challenges; an energy transition from a system based on imported

fossil fuels to a flexible and interconnected system based on clean, renewable and infinite

domestic resources.

European Policy has very successfully taken the first generation of renewable energy

technologies, such as solar and wind, to commercially competitive levels. The EU will, however,

need other technologies to further diversify its low-carbon generation capacity, if it is to meet its

objective of reducing greenhouse gas emissions to 80–95 % below 1990 levels by 2050. By 2050

power generated by the ocean energy sector could avoid the equivalent of 276m tonnes of CO2

emissions annually.

Ocean energy comprises five distinct technologies: wave energy, tidal stream energy, tidal range

energy, ocean energy thermal conversion (OTEC) and salinity gradient power generation [See

Annex 4]. The variations in ocean resource and location will require different technological

concepts and solutions. In order to speed up the time to market of ocean energy technologies it is

important to prioritise and concentrate efforts for a limited number of technologies. Priority will

be given to tidal stream and wave energy which have a high market potential for Europe and

sufficient scale on a European level. It should be noted that OTEC and other technologies can

form part of future considerations if a roadmap and actions are agreed developed for these

technologies.

As a unique chance to create a new industrial sector, created in Europe, generating jobs in its

regions throughout the local supply chain, Europe needs continued investment and support to

ocean energy. Spurred by ambitious renewable energy policies, the European ocean energy sector

is a world leader today, home to the most advanced technology in the world. This technological

advantage, and the need to stay close to the resource to reduce costs, ensures that manufacturing

remains European.

Ocean energy can be an EU industrial success story. With favourable support over the coming

decade, Europe will obtain leadership in a global market, worth a potential €653bn between 2010

and 2050, and an annual market of up to €53bn, significantly benefiting the European economy.

The successful development of a competitive European ocean energy industry would also place

the European industry in a prime position to seize export opportunities in the global market.

The work of the SET Plan Ocean Energy Temporary Group has taken into account the set of key

actions identified within the Strategic Roadmap, as this is considered to be the Declaration of

Intent agreed by the EU Commission, Regions, Member States, Stakeholders and the Ocean

Energy Industry and these actions are the focus of this implementation plan.

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1.1. THE VISION OF THE OCEAN ENERGY IMPLEMENTATION PLAN

Given the wide range of different actors involved in the ocean energy sector, including

governments at regional, national and European levels, coordination and a common vision will be

essential if the agreed targets for tidal stream and wave energy are to be met.

The various high-level actions of the Implementation Plan are listed at the end of the document.

These contain cross-cutting actions that impact the overall ocean energy sector (e.g.

environmental consenting procedures, the creation of an EU Insurance and Guarantee Fund).

There are also several actions, which relate specifically to tidal stream and wave. While not

precluding wider action on other aspects of these technologies, the primary focus of actions over

the coming years should be on the following areas:

Tidal stream: Demonstration projects in operational environments, based on arrays of devices

with TRL levels of 7-9, to bring tidal stream technology to the point of industrial roll-out. This

includes continued support for development of tidal stream technology with TRL levels up to 6,

to ensure that knowledge and experience from the demonstration projects can be channelled back

into technology improvements.

Wave: A systematic and structured focus on support for technology development up to TRL

level 6. This should be part of a wider initiative to create stage gate metrics for wave device

components and sub-systems, which will support the competitive procurement of reliable wave

devices up to a TRL level of 8. This will also require a support mechanism for wave array early

demonstration projects in real environments – such support is currently missing in Europe.

It should be noted that OTEC will also be included in future reviews once the technology

roadmap is further defined and agreed actions for that technology are proposed.

1.2. ANALYSIS OF EXISTING ACTIONS AT MEMBER STATES AND REGIONAL

LEVEL

Cooperation and coordinated actions can only be undertaken if there is a solid understanding of

the different activities that are currently taking place across Europe.

The Working Group therefore agreed to carry out a high level mapping exercise of activities that

are currently ongoing in the Member States. This would serve as an indication of the level of

support available and the focus of the Member States activities.

The mapping exercise requested any information available on four key aspects of local support:

- Is there an Ocean Energy Policy in the Member State or Region?

- If so, has it a specific owner and a responsible agency for implementation and oversight?

- Identification as to whether the MS had specific local technical, financial and

environmental actions

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- An outline of the indicative budget available for the implementation of these actions

As an overall result, the TWG wished to get a high level understanding regarding the national

intent and plans for the next 3 years. This has helped in understanding the structure of the

priorities.

After having mapped the priorities in the different Member States and Regions a high level table

was completed (see Table 5 below) which presents the presence of local plans, relevant actions

and the funding available. There are more details available on local programmes as a result of

the mapping exercise and these will be made available as a baseline when the monitoring plan is

developed.

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Table 1. High level mapping of current Ocean Energy activities in MS and Regions and indicative available support

Is there a national Ocean Energy Policy

outlined?

Is there an assigned Ministry/

Department owner at

Government Level?

Is there operational

responsbilility for the delivery

of the Ocean Energy

porgrammes

National PRIORITY ACTIONS - TECHNICAL

PRIORITY ACTIONS - ENVIRON

PRIORITY ACTIONS - FINANCE

PRIORITY ACTIONS -

OTHER

2016 - Amount (€M) spent on

Ocean Energy by MS

2017 budget planned

Estimated Budget allocation from 2018-2020

(note this is not considered as commitment only an indicative

estimate of possible allocation of budget to 2020)

IE YES YES YES YES YES YES YES 4M EUR 5M EUR Yes - Under the OREDP the

Government committed 30M EUR up to 2020

BE NO* YES NO YES 0.6M EUR

CY YES NO YES YES YES YES 99M EUR 20M EUR

DE

ES NO * YES YES YES YES 1M EUR TBC

ES (Basque) YES YES YES YES YES 2.5M EUR 2.5M EUR Demonstration programme: 5M

EUR

ES (Cantabria Region)

YES YES YES YES 6.0M EUR

FR YES YES YES

FR (Normandy) YES YES YES YES YES

PT YES YES YES YES YES YES YES 0.44M EUR 18.9M EUR 23.15M EUR

IT YES YES YES YES YES YES YES 1M EUR 0,5M EUR Yes - approximately 6M EUR up to 2020 through competitive national

projects

SE No * YES YES YES YES YES YES 4.3M EUR 2.7M EUR 3.9M EUR allocated so far (from Swedish Energy Agency). NB: most likely more funding will be allocated

UK (NI) YES YES YES YES YES YES YES No No N/A

UK(Wales) YES YES YES YES YES YES YES 3M EUR 8M EUR 45M EUR

UK (Scotland) YES YES YES YES YES YES YES 15 M EUR 15 M EUR 45M EUR

UK (BEIS)

Note: * Denotes there is not a defined ocean energy policy however it is considered that the national renewable energy policy includes the ocean energy sector

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ANALYSIS OF OCEAN ENERGY PROJECTS IN THE CONTEXT OF

THE SET-PLAN OCEAN ENERGY TWG

Prepared by Davide Magagna – DG JRC for the Technical Working Group

PLEASE NOTE DATA REGARDING NATIONAL PROJECTS MAY NOT BE COMPLETE DUE TO

AVAILABILITY OF NATIONAL PROJECTS INFORMATION. IF YOU HAVE COMPLIMENTARY

INFORMATION THAT WOULD STRENGTHEN THE ANALYSIS PLEASE SEND IT TO

[email protected]

A review of policy mechanisms supporting the development of ocean energy technologies is

undertaken in order to understand the level of support received by the sector and to identify

any gaps that may need to be addressed for the design of specific collaborative actions at

European level.

The analysis takes into account EU funds made available through different R&D Framework

programmes (FP6, FP7, Horizon 2020), national and regional programmes collected by the

JRC and ongoing contributions from the SET-Plan TWG in the period between 2007, year in

which the SET-Plan started and 2019.

European, National, Regional and Ocean-ERA-NET programmes have contributed to fund

ocean energy projects for a total of 1.36 b EUR, of which 776 m publicly funded. Projects

expected to begin in 2018 and 2019 such as NER300 and demonstration projects are

accounted in the analysis. A breakdown of the funds and project cost is provided in Table ,

whilst Error! Reference source not found. presents the breakdown of funds given to wave

nd tidal energy technologies.

In total, 270 m EUR of funds have been directed to Wave energy R&D, and 470 m EUR to

tidal energy. In contrast, in the period between 2008 and 2017, the United States Department

of Energy has provided $327 million in funds to ocean energy, of which 77% directed to

wave energy R&D.

Table 2 Breakdown of funds for ocean energy through European National, Regional and OceanERA-NET support.

Total Projects Cost Funding Contribution

OceanERA-NET € 11,984,284 € 8,000,000

ERDF € 264,941,103 € 209,509,646

EU € 657,529,725 € 363,731,270

National € 436,629,384 € 199,288,780

Total € 1,364,908,496 € 776,382,084

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Figure 1. Funding directed wave and tidal energy technology for the period 2007-2019. Projects or programmes

direct to ocean energy in general are not taken into account in this graph.

Each project has been assessed to evaluate the Technology Readiness Level (TRL) of the

technology under investigation at the start of the research project. EU support for wave

energy is predominant for mid-TRL projects (TRL 5, 6); whilst support for tidal energy at EU

level is mainly directed to single device demonstration (TRL7) and demonstration projects

(TRL 8). In terms of national support, it can be seen that funds directed to wave energy are

addressing low-medium TRL technology. National funds supporting the development of tidal

energy technology play a key role for medium high TRL, as shown in Figure 2.

For tidal energy in particular, the availability of different funding and financial instruments

provided by the EU and Member States is facilitating the deployment of first-of-a-kind

demonstration projects (TRL8).

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Figure 2 Funding directed to ocean energy per TRL for the period 2004-2019. Project of programmes where no specific TRL information could be retrieved are categorised under no TRL info. Programmes directed to ocean energy R&D without further details are omitted from the analysis.

Historically, support for tidal stream technologies and wave energy has historically been very

different (Error! Reference source not found.). Wave energy has benefitted from EU funds

rom the early 2000s. Many mid-TRL projects have been supported with the FP6 Framework

Programme. Most recently, however, projects supported through Horizon 2020 calls are

mainly focussing on lower TRLs (TRL3-5) technologies. Only a limited amount of projects

are supporting demonstration of single unit or arrays in real water. The distribution of public

support reflects previous calls made to encourage work on fundamental research and

developing phase-gate procedure to ensure that TRL progression is measured and that funding

instruments are directed to technologies that have successfully met the requirement needed for

each stage. If wave energy technology currently at TRL 4-5 was to progress to a higher TRL

would have limited support mechanisms in place. This gap should be addressed later on in the

implementation phase of this plan.

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Figure 3. Assessment of the phase of development (TRL) for each project/funding stream. The size of

the bubble refers to the number of projects awarded

Funding support for tidal energy technology was provided predominantly through national

grants in the period from 2004 to 2010. EU funds and loan support have been awarded from

2012 onwards, focusing on supporting single demonstration of devices and pre-commercial

farms at high TRLs. Error! Reference source not found. shows the technology progression

f some flagship tidal energy technologies7 and highlights how the combination of national and

EU support is driving the deployment of demonstration arrays. In many cases the availability

of both national and EU funds is necessary for the developer to reach final investment

decision. Better coordination among funding bodies and available funds across Europe could

play a key role in increasing the deployment rate of demonstration tidal energy farms.

7 It should be noted that EU and National funds show in Error! Reference source not found. are often directed to a consortium working on

given project and not to the technology developer alone. We refer to projects that are contributing to the development of the same

technology family, identified by the name of the developer.

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Figure 4. Tidal energy R&D projects grouped by technology, TRL and public funding. Projects funded by the

EU are highlighted in red. Funds are considered for project consortium and do not indicate support received by

single developer.

The mix of contribution available in Europe from EU, national and regional funding could

provide a significant boost to the development of wave and tidal energy technologies in

achieving the targets set in the SET-Plan DOI. It is suggested that, in line with the

recommendation from the Ocean Energy Forum Roadmap, support for ocean energy is

provided for wave and tidal energy technology accounting for their different level of

technology development.

The project analysis indicates that coupling projects funding with stage-gate metrics would

help drive progression in the technology, and that for the case of wave energy in particular,

low and mid-TRL programmes should be reinforced.

The Links between Financial Actions and Technical Actions

It is recognised that in order to meet the technical actions outlined in the plan there is a

requirement for significant financial support in order to enable these actions. While there is no

one solution that meets all needs there are a number of solutions that Member States can

consider and some are already in place. Over the Phase 1 feasibility DISCOVERY phase it

will be important for Member States, Regions and EC to determine the possible blended

solutions that will enable the actions. Some of the forms of funding mechanisms are listed

below

1. Local capital grants

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2. Pre commercial procurement funding

3. Revenue support schemes from MS

4. European Funding (H2020, InterReg, Research Funding, Infrastructure programmes)

5. EIB Loan funding

While some or all of these have been used as a wide range of support mechanisms at

regional, national and European-level, the main focus to date has been in the form of

grants or financial instruments. It is recognised by the TWG that it is time to encourage the

use of other financial instruments.

Tidal technology in particular has now reached the point where a range of different devices

have reached high TRL levels, with demonstrated performance in real operational conditions

– in some cases as part of wider arrays.

Continued investment support will be required to reduce capital costs and lower total projects

costs. Yet large scale deployment requires revenue support to attract investors.

Dramatic reductions in LCoE will only be realised through deployment to ramp up ‘learning

by doing’ and through mass production delivering economies of scale and scope.

Currently tidal stream is competing on the market against other technologies which already

managed to attain lower LCoEs via large scale deployment. These technologies have all been

received significant & targeted revenue support. Only equivalent support will ensure

industrial roll out of ocean energy and give the sector a chance to reach ambitious 2035

targets.

The aim of this plan (and in particular the first phase) is to support collaboration of MS,

Regions and EC to ensure that the financial and technical actions work in tandem and allow

for the co-ordinated development of the sectors.

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THE ACTIONS TO BE MONITORED UNDER THIS IMPLEMENTATION PLAN

The TWG recognises the need to monitor the following key operational actions at Member

State level that will ensure the progress of the ocean energy sector in line with the aspirations

of the Strategic Roadmap and the work of the ETIP. The actions that emerged are also based

on the local mapping analysis feedback and supported by project review carried out for the

TWG. Under this Implementation Plan the actions are accompanied by a detailed activity

fiche with resources, targets, and ownership. The Members of the TWG and Stakeholders will

collate the results of activities related to these actions each year to monitor and report on

progress at EU, MS and Regional levels.

The high level actions are grouped as follows

Technical Actions

Tidal energy – assist technology development and knowledge building up to TRL6

Tidal energy – support system demonstration in operational environment and

knowledge building in the TRL 7-9 categories.

Wave energy – support technology development, system demonstration and

knowledge building up to TRL6

Wave Energy – encourage and support device and system demonstration at early

demonstration array scale up to TRL 7- 9.

Collaborate in the areas of installation, logistics and infrastructure

Co-ordinate the development of standards and guidelines for wave technology

evaluation and LCoE analysis.

Financial Actions

Investigate the potential for creation of an Investment Support Fund for ocean

energy farms: EU and National Authorities should collaborate in order to create a

Fund providing flexible capital, and enabling further private capital to be

leveraged

Progress the creation of an EU Insurance and Guarantee Fund to underwrite

various project risks: This would be targeted at the first ocean energy projects to

cover risks such as availability, performance, unforeseen events, failures, etc.

Consider the provision of a common reserve fund available to multiple projects in

the initial farm or plant roll-out, to spread the risk and reduce the cost of providing

guarantees.

Support the development of a collaborative procurement model adaptation of the

"Wave Energy Scotland" approach for wave energy development at EU Level

using pre commercial procurement or similar.

NOTE: It is important to state that both the Technical and Financial actions are inter-

dependant on each other and must be considered in parallel. The Financial actions are really

the key enablers for the technical actions.

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Environmental Actions

Collaboration on the development of certification and safety standards for the

development, testing, deployment of ocean energy devices,

Continue the de-risking of environmental consenting through an integrated

programme of measures and in particular through promoting open data sharing.

More details about each action are provided in the Action Fiches (Annex 7).

A full review of the financial figures in Action Fiches was carried out and now the total figure

estimate as required to enable the plan to 2030 is just over 1.2BN EUR. Note that this does

not include numbers for action 2.1 (est. 200M-300M) and 2.2 (50M) based on the fact that

this investment funding would be provided as a result of (or alongside) the 1.2BN investment

by Industry, MS and EC and not as a part of it. The outline of funding was calculated by

action per annum and distribution estimated as per the tables below and a high level

breakdown is contained in Annex 8 noting that the figures are initial estimates and will need

to be validated and agreed over the life of the implementation plan.

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THE MONITORING PLAN

The TWG has agreed that the high level principles of the monitoring plan will be as outlined

below however the methodology will have to be developed by the TWG before September

2018.

The monitoring activities proposed are

1. To carry out the resource and supports mapping annually (re run the exercise carried

out for this plan but with requesting more details on local activities)

2. Request each MS to complete a register of funded projects and ensure that funding

recipients complete a report that captures LCOE progress. The format of reporting and

details required will be developed by the working group and agreed by all

Stakeholders.

3. Request each MS and region to report separately on their activity under each action as

part of the annual review.

4. The monitoring plan will ensure maximum transparency across Industry, MS, Regions

and EC to outline what funding is going towards the sector development

It is also anticipated that, once this plan is adopted, the Working Group will evolve to assume

the role of an Implementation Working Group (IWG) during the execution of the IP and that

appropriate resources will be assigned to the administration and collation of the reporting

each year for the life of the plan. This will cover the DISCOVERY phase of the plan and a

progress review will be carried out to determine how the oversight of sector development will

evolve for the follow on phases.

The EC intends to facilitate through a Coordination and Support Action (CSA) the

coordination activities needed for the execution of the IPs8. The proposed consortium should

count with the participation of research organisations and/or companies (industry) committed

in principle to execute all or some of the R&I activities specified in the corresponding IP as

endorsed by the SET Plan Steering Group.

8 See topic "LC-SC3-JA-2-2018: Support to the realization of the Implementation Plans of the SET Plan" of the Horizon 2020 Work

Programme 2018-2020 - Secure, clean and efficient energy

21

INDICATIVE TIMELINES

The chart below sets out an indicative timeline and phases of development for the sectors and

this will be reviewed as part of the monitoring plan to determine progress and pace.

22

ANNEX 1: STAKEHOLDERS AND COUNTRIES INVOLVED IN THE PROCESS

Following the Declaration of Intent the Temporary Working Group was formed to develop

the implementation plan. The group is made up of Representatives from the EU Commission,

Member States, the Regions and Stakeholders listed below.

a) Composition of the Temporary Working Group

IE Declan Meally (TWG Chair)

BE Lut BOLLEN

BE Ludovic Mouffe

CY Constantinos HADJISTASSOU

DE Volker MONSER

ES María Luisa Revilla Trujillo

ES Pilar Gonzalez Gotor

FR Nicolas Tonnet

PT Ana ANDRADE

IT Gianmaria SANNINO

SE Maria Olsson

SE Magnus Carnwall

UK Julie Steel

UK Janine Kellett

OEE Jacopo Moccia

OEE Kasparas Kemeklis

EERA JP Henry Jeffrey/David Bould

EERA JP David Bould

EERA JP Jose Luis Villate

EC-MARE Xavier GUILLOU

EC-JRC Davide MAGAGNA

EC-ENER Alexandros KOTRONAROS

EC SET Plan SET Plan secretariat

EC-RTD Matthijs SOEDE

EC-RTD Sandya ABRAR

OCEANERANET Karen Fraser

FR Pascal BARTHE

UK Steve MARTIN

FR Pascal Newton

23

ANNEX 2: OUTPUTS FROM STRATEGIC ROADMAP

24

ANNEX 3: FINANCING/FUNDING SOURCES

Funding controlled by Member States

Most Countries have Research and Innovation programmes, usually limited to TRL level 7.

Higher TRL financial support provided by Member States need to comply with the EU's State

aid rules. Relevant documents are two Commission Communications: 1. Framework for State

aid for research and development and innovation9, which limits aid intensity for applied

research undertaken by large enterprises to 60% (or 70% in case of cross-border cooperation

or cooperation with an SME or a research organisation); 2. Guidelines on State aid for

environmental protection and energy 2014-202010

which in the case of CCS, energy

infrastructure, district heating infrastructure and aid in the form of tradable permits allows for

a higher aid intensity (up to 100%).

Important Projects of Common European Interest (IPCEI) are transnational projects of

strategic significance for the EU. In 2014 the European Commission adopted specific State

aid guidelines for IPCEIs11

allowing Member States to provide financial support to such

projects undertaken by industry beyond what is usually possible for R&D and innovation

projects. For example, public funding may also support the first industrial deployment of the

results of an R&D project and may cover a higher percentage of the funding gap. An example

is the IPCEI on High Performance Computing (HPC) and Big Data Enabled Applications

launched in January 2016 by Luxembourg, France, Italy and Spain12

.

Within European Structural and Investment Funds (ESIF), the relevant fund is the European

Regional Development Fund (ERDF). However, the ERDF Regulation stipulates prohibits

supporting investments to achieve greenhouse gas reductions from activities covered by the

ETS. R&I activities can nevertheless be supported if they are included in the Smart

Specialisation Strategy of the respective Member States or region13

. This is a bottom-up

process, hence the initiative would need to come from the Member State.

Funding by European Investment Bank (EIB)

The European Fund for Strategic Investment14

(EFSI) ("Juncker Plan") can be relevant in case

projects expect to have a business case / achieve a Return on Investment (possible with

complementary funding by grants) and the main hurdle is the reluctance of banks to provide

loans to inherently risky innovation projects. A key objective of EFSI is to leverage additional

private funding, hence EFSI may be most appropriate for R&I activities rather close to the

market and with confirmed revenue support

9 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52014XC0627(01)

10 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52014XC0628%2801%29

11 http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.188.01.0004.01.ENG

12https://ec.europa.eu/commission/commissioners/2014-2019/oettinger/blog/luxembourg-launches-supercomputing-project_en

13 http://s3platform.jrc.ec.europa.eu/

14 http://www.eib.org/efsi/; https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan_en

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52014XC0627(01)

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52014XC0628%2801%29

http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.C_.2014.188.01.0004.01.ENG

https://ec.europa.eu/commission/commissioners/2014-2019/oettinger/blog/luxembourg-launches-supercomputing-project_en

http://s3platform.jrc.ec.europa.eu/

http://www.eib.org/efsi/

https://ec.europa.eu/commission/priorities/jobs-growth-and-investment/investment-plan_en

25

InnovFin-EDP15

(Energy Demo Projects) enables the EIB to finance innovative first-of-a-kind

demonstration projects in the fields of renewable energy, sustainable hydrogen and fuel cells.

In projects focusing on hydrogen production/distribution, the hydrogen should come primarily

from renewable sources. The projects may include first-of-a-kind power, heat and/or fuel

production plants and first-of-a-kind manufacturing plants. The EIB provides loans of

between EUR 7.5m and EUR 75m. InnovFin-EDP has been designed to address the financing

bottleneck identified in the EU’s Strategic Energy Technology (SET) Plan. EIB loans are

subject to a project’s bankability prospects, meaning that they will only be for projects very

close to the market and with confirmed revenue support.

European Commission programmes

Currently available EU grants are limited to Horizon 2020 and the Research Fund for Coal

and Steel (RFCS16

), which, however, are not aimed at TRL higher than level 7.

The Innovation Fund (IF) was proposed by the Commission as part of a reformed Emission

Trading System (ETS). The type of instrument (grant, loan, guarantee) is not yet decided, it

might depend and evolve with the maturity of the project. Current planning is to adopt a

Delegated Regulation setting the Fund's detailed rules in the first half of 2018 with the Fund

being operational in 2020. Before 2021 (and conditional to the new ETS Directive being

adopted) available funding are the proceeds from 50 million ETS allowances from the Market

Stability Reserve and the leftovers from NER300 (up to EUR 1 billion). For the period from

2021 to 2030, proceeds from an additional 400 million (Commission proposal) or 600 million

(European Parliament amendment) ETS allowances would be available. The value of one

allowance is the price of ton of CO2, when the allowance is auctioned (today the ton of CO2

is valued at around 5 EUR, but it is expected to be higher with the implementation of the

proposed ETS reform).

The Commission proposal for a new ETS Directive defines the scope of the Innovation Fund

rather broadly: demonstration projects in the areas CCS, innovative renewable energy

technologies and low-carbon technologies and processes in industrial sectors covered by the

ETS. The Innovation Fund could cover a maximum of 60% of the costs of projects.

15

http://www.eib.org/attachments/thematic/innovfin_energy_demo_projects_en.pdf 16

Could be interesting for R&I projects in the steel industry requiring co-funding of not more than around EUR 3 million

(http://ec.europa.eu/research/industrial_technologies/rfcs_en.html)

http://ec.europa.eu/research/industrial_technologies/rfcs_en.html

26

ANNEX 4: OCEAN ENERGY

Ocean energy comprises five distinct technologies. The variations in ocean resource and

location will require different technological concepts and solutions.

Wave energy converters derive energy from the movement of waves and can be located

flexibly – on the shoreline, the nearshore or offshore at depths of over 100m – to harness

the available energy most efficiently. A range of full-scale prototypes have been

deployed, however, further technology development, testing and demonstration are

required prior to commercialisation and industrial roll-out.

Tidal stream turbines harness the flow of the currents to produce electricity. Tidal

turbines can be fixed directly to and mounted on the seabed, or tethered/moored to the

seabed and buoyant, floating on surface or in mid water. A number of device designs are

at a late TRL stage, and are feeding electricity into the grid in real operational

environments – both individually and as arrays.

Tidal range uses the difference in sea level between high and low tides to create power.

Tidal range technology uses the same principles as conventional hydropower, and

requires a barrier to impound a large body of water, driving turbines generating

electricity. Tidal range is the more established ocean energy technology, with several

projects generating power around the world. FINAL NOVEMBER 2016 16 | OCEAN

ENERGY FORUM

Ocean Thermal Energy Conversion (OTEC) exploits the temperature difference between

deep cold ocean water and warm surface waters to produce electricity via heat-

exchangers. OTEC is suited to oceans where high temperature differences will yield the

most electricity. A number of demonstration plants are being developed in EU overseas

territories opening up export opportunities.

Salinity gradient power generation utilises the difference in salt content between

freshwater and saltwater, found in areas such as deltas or fjords, to provide a steady flow

of electricity via Reverse Electro Dialysis (RED) or osmosis. Deployment potential is

significant around Europe, however, further technology development is required to bring

salinity gradient to maturity.

27

ANNEX 5: WIDER POLICY CONTEXT

The Energy Union Strategy17

, launched in early 2015 and being one of the 10 big priorities

of the European Commission (EC), includes research, innovation and competitiveness at the

same level of importance with its 4 other dimensions, for accelerating the decarbonisation of

the European energy system cost-effectively. The Strategic Energy Technology (SET) Plan

has been recognised as one of the major tools to deliver this goal by contributing to the cost

reduction and improve of performance of low carbon energy technologies through impactful

synergetic innovation actions.

As part of the deliverables of the Energy Union strategy, the European Commission adopted a

Communication for an Integrated Strategic Energy Technology Plan18

. The

Communication identifies ten priority actions to accelerate the energy system transformation

through coordinated or joint investments between European countries, private stakeholders

(including research and industry) and the European Commission. These actions have been

defined building on the proposals of the Integrated Roadmap (that was developed with

stakeholders and Member States) and in line with the new political priorities defined in the

Energy Union strategy.

The first round of the public consultation process was dedicated to the 1st Energy Union

Research, Innovation and Competitiveness common priority, for "being the world leader in

developing the next generation of renewable energy technologies including environment-

friendly production and use of biomass and biofuels, together with energy storage". It focused

on Actions 1 and 2 of the SET Plan Communication (C(2015)6317):

Action 1: "to sustain technological leadership by developing highly performant

renewable technologies and their integration in the EU's energy system"; and

Action 2: "to reduce the cost of key technologies"

Out of the ten priorities, these actions are the most relevant action for the Ocean Energy

Temporary Working Group (TWG).

To initiate this consultation, and on the basis of the SET Plan Integrated Roadmap, the

European Commission developed Issues Papers that addressed the R&I challenges for

concentrated solar power/solar thermal electricity (CSP/STE), offshore wind, photovoltaic,

ocean and deep geothermal sectors/technologies. For the first three Issues Papers - on

CSP/STE, offshore wind and photovoltaic - the European Commission initiated the public

consultation in October 2015 by sending these Issues Papers to relevant research and

industrial stakeholders and SET Plan countries requesting them to take position on the

proposed targets/priorities in accordance with the guidelines set out in the document entitled

''the SET Plan actions – Implementation process and expected outcomes''.

Relevant stakeholders and SET Plan countries were invited to provide their comments for this

public consultation round in the form of "input papers" by 20th

November 2015. During a

17

Energy Union Package, COM (2015)80 final. 18

C(2015) 6317 final

https://setis.ec.europa.eu/system/files/integrated_set-plan/communication_set-plan_15_sept_2015.pdf

28

dedicated SET Plan Steering Group meeting on 9th

December 2015, invited stakeholders and

SET Plan countries discussed the Issues Papers and reached an agreement on common targets

that took the form of a Declaration of Intent (DoI). At the Steering Group meeting of

20th

January 2016, the DoIs for CSP/STE, Offshore Wind and Photovoltaic were endorsed.

Following the same process, for ocean energy and deep geothermal energy, stakeholders and

SET Plan countries were invited to provide comments in the form of "input papers" by

17th

June 2016. They were requested to take position on the proposed targets/priorities again

in accordance with the guidelines set out in the document in the box underneath. During a

dedicated Steering Group meeting on 12th

July 2016, stakeholders and SET Plan countries held

discussions on the Issues Papers and reached an agreement on common targets. Following a

period of review, the Declarations of Intent (DoIs) for both deep geothermal and ocean energy

were presented and endorsed at the Steering Group meeting of 14th

September 2016.

The high level targets for the ocean energy sector are

5. to bring ocean energy to commercial deployment,

6. to drive down the levelised cost of energy (LCoE),

7. to maintain and grow Europe’s leading position in ocean energy and

8. to strengthen the European industrial technology base, thereby creating economic

growth and jobs in Europe and allowing Europe to compete on a global stage.

Ocean energy technologies need to demonstrate their reliability and capacity to survive in

aggressive sea conditions ensuring, device availability to reduce risk for project developers

and investors. They need to demonstrate their market potential and with sufficient capacity

deployment, become cost‐ competitive in comparison with other energy technologies.

29

ANNEX 6: THE WORK OF THE OCEAN ENERGY TEMPORARY

WORKING GROUP

Following the endorsement of the Declaration of Intent by the SET Plan Steering Group on 20

April 2017, the Temporary Working Group for Ocean Energy was setup. Ten Countries have

joined the TWG, Ireland taking up the Chairmanship. Stakeholders joined the TWG,

represented by the relevant Government Agencies, Regional representatives, stakeholders and

industry sectors representatives, research associations and the education sector. The

composition of the TWG can be found in Annex 1.

a) THE TWG PROCESS

The Ocean Energy TWG convened in April 2017 to discuss, develop and agree the process

the members would follow in creating this implementation plan. The TWG acknowledged

that they should work to common principles agreed by the SET Plan Steering Group. At the

first TWG workshop working methods were agreed within by Working Group to take

account of the characteristics of the sector identifying the SET Plan targets. The Ocean

Energy TWG considered that much of the ground work and analysis of the sector needs was

already carried out through the previous developments and formed the Declaration of Intent.

The TWG particularly considered the actions outlined Ocean Energy Forum and the European

Technology and Innovation Platform on Ocean Energy (ETIP Ocean) Strategic Roadmap

which was launched in 2016.

The Working Group immediately identified the need to find out what activities and supports

were in place in the Member States and Regions and to see how these align with the high

level actions of the Strategic Roadmap and DoI.

b) THE OCEAN ENERGY STRATEGIC ROADMAP

The Ocean Energy Forum presented the Ocean Energy Strategic Roadmap in November

2016. This Roadmap reflects the common vision of the ocean energy sector, and was

produced through a series of meetings, workshops and open-session conferences of the Ocean

Energy Forum, which was set up in April 2014 following the European Commission’s

adoption in January 2014 of the communication ‘Blue Energy – Action needed to deliver on

the potential of ocean energy in European seas and oceans by 2020 and beyond’.

The Strategic Roadmap identifies a path forwards, building on European leadership in ocean

energy, and developing technologies that can meet a significant amount of Europe’s power

demand over the next 35 years. Main priority areas for technological progress are identified in

the roadmap, but also four key Action Plans focused on maximising private and public

investments in ocean energy development by de-risking technology as much as possible,

ensuring a smoother transition from one development phase to another on the path to

industrial roll-out and a fully commercial sector.

30

c) THE EUROPEAN TECHNOLOGY AND INNOVATION PLATFORM FOR

OCEAN ENERGY

The European Technology and Innovation Platform for Ocean Energy (TP Ocean) also

presented the Strategic Research Agenda for Ocean Energy. This agenda is in line with the

main technology focus areas presented in the Ocean Energy Strategic Roadmap. It identified

essential priority areas to be addressed to improve ocean energy technology and decrease its

risk profile.

• Testing sub-system components and devices in real sea conditions.

• Increasing the reliability and performance of ocean energy devices allowing for future

design improvements.

• Stimulating a dedicated installation and operation and maintenance value chain, to reduce

costs.

• Delivering power to the grid, with hubs to collect cables from ocean energy farms and bring

power to shore.

• Devising standards and certification, to facilitate access to commercial financing.

• Reducing costs and increasing performance through innovation and testing.

These areas were the starting point for the Ocean Energy Forum, bringing together more than

100 ocean energy experts over two years, to develop the Strategic Roadmap. The outputs

from the Strategic Roadmap, including the actions and proposed roadmap implementation

plan are contained in Annex 2 of this document.

31

ANNEX 7: ACTIONS FICHES

STRATEGIC ENERGY TECHNOLOGY PLAN

TECHNOLOGY DEVELOPMENT ACTIONS

SECTION 1 - TECHNICAL ACTIONS

Action 1.1 Tidal Energy technology device development and knowledge

building up to TRL6

Description of each R&I Activity (repeat as many times as the number of R&I Activities)

Title: Tidal Energy technology device development and knowledge building up to TRL6

Targets: Reduction of LCOE for tidal energy to 10

cEUR/kWh by 2030 [or relevant metric coming from action 1.6 – stage gate metrics]

Monitoring mechanism: MS and regions to complete an annual register of projects funded

Scope: Focus on technology development and reduction of costs and encourage transfer of knowledge across the sector

and from other sectors and between Member States, Industry, research organisations and academia.

Description: Support to address the need to develop reliable, robust and efficient technology that will ensure long-term cost-reduction. For novel system and sub-system concepts (TRL 1-3) to identify promising technologies that could offer step changes in cost or performance. For intermediate technologies (TRL4–6) to support development towards greater technology maturity. Facilitation of greater levels of knowledge transfer to increase cross-sector collaboration.

The action will help drive the development of low TRL tidal energy technologies focusing primarily on the identification of future emerging technologies and components that could underpin significant cost-reduction for tidal energy technology including currently more advance technology. The investigation of alternative materials to the traditional use of steel and concrete have to enable improvement in cost, performance and survivability. Innovative material and manufacturing processes have to be applied to the main structure of the converter, or to critical components such as blades, moorings and foundations, and electrical components. Activities include the development of novel and improved power take offs (PTO) for the improvement of tidal devices performance.

TRL Start: 1-3 TRL End: 6

Total budget required: 145M EUR estimate from 2018 to 2025

Expected deliverables Timeline

Annual Pipeline of projects under delivery in each

member state.

Innovative technologies and knowledge to improve

the current tidal turbine technologies to be more

effective and reliable.

01/2018 to 12/2025

Party / Parties

Implementation

instruments Indicative financing contribution

Industry , OEE Dedicated industrial investment (private funds)

40M EUR from 2018 to 2025

32

MS & Regions, National funding programmes (incl. public & private contributions) combined in bi- or multilateral projects.

52.5M EUR (2018-2025) Included in national programs, in

combination with Ocean-ERA NET

OceanERA-NET Co-fund 15 M EUR funds

(Note this funding is split across

Actions 1.1, 1.2 and 1.3)

EU H2020, Co Fund 52.5M EUR (2018 – 2026)

Fiche Curator (initials): Date: Revised by (chair initials) Date of revision:

UK, TWG – IOG Members 28/09/2017 DM 28/02/2018

33

Action 1.2 Tidal energy system demonstration in operational environment

(TRL 7-9)


Title: Tidal energy system (device and array) demonstrations and knowledge building in operational environment (TRL 7-9)

Targets: Reduction of LCOE for tidal energy to 15 cEUR/kWh by 2025

Monitoring mechanism: MS and regions to complete an

annual register of projects funded

Scope: Tidal energy device and array cost and risk reduction with transfer of knowledge across the sector and from

other sectors and between Member States, Industry and academia.

Description: Demonstration projects including flagship Meygen 1.A, H2020 and NER300 supported Meygen 1.B, Raz Blanchard array, Shetland Array and the FloTec (floating tidal project by ScotRenewables) are taking place around the EU. Further support for new next generation technologies to be developed and tested at full scale is needed to keep the very best technologies progressing. Support for early demonstration arrays is needed to enable further innovation and learning to increase reliability and performance and reduce costs and risk. Facilitation of greater levels of knowledge transfer to increase cross-sector collaboration.

Several demonstrations will showcase the broad potential of tidal energy, providing further technology validation and helping bridging the gap between technology development and commercial roll-out by reducing the technological risk for the developers involved.

TRL Start: 7 TRL End: 9

Total budget required: 395M EUR (starting with three single device full scale demonstrations; four 10MW demonstration arrays and leading to large scale deployments)


Demonstrated technologies ready for

commercialisation.

Pipeline of projects under delivery

Large scale deployments after 2025

01/2019 to 12/2022

2020 – 2025

Party / Parties Implementation instruments Indicative financing contribution

Industry, OEE Dedicated industrial development.

Indicative financing contribution 152M EUR 2019-2030)

MS, EU OceanERA-Net Co-fund National Programmes and Regional funding

Included in Action 1.1

EU H2020 multiple projects (multiple-)until 2021 InnoFIN EDP

121.5M EUR (2019-2030)

MS & Regions National funding programmes (incl. public & private contributions) combined in bi- or multilateral projects.

121.5M EUR (2019 -2030)

Regions Dedicated regional support Included in amount above


UK, 10/10/2017 DM 28/02/2018

34

Action 1.3 Wave energy technology development and demonstration up to

TRL 6


Title: Wave energy - technology device development, including system demonstration and knowledge building

(up to TRL6)

Targets: Reduction of LCOE for wave energy to 10 cEUR/kWh by 2035


Scope: Wave energy device cost and risk reduction with transfer of knowledge across the sector and from other sectors

and between Member States, Industry and academia.

Description: Support to address the need to develop reliable, robust and efficient technology that will ensure long-term cost-reduction.

For novel system and sub-system concepts (TRL 1-3) to identify promising technologies that could offer step changes in cost or performance. For intermediate technologies (TRL4–6) to support development towards greater technology maturity and technical convergence.

The action should aim at identifying novel concepts for innovative power take-off systems, and improvement of current design. The expected outcome will be the development of reliable and performant PTOs that will maximise the energy capture. The development and demonstration of innovating wave energy converters is expected to take place in this action, with the evaluation of relevant technology expected to pave the way for technology convergence at a later stage.

TRL: 1-6

Total budget required: 222.5M EUR


Pipeline of projects under delivery

WEC, system and sub-system development

Innovative technologies and knowledge transfer in

wave energy to be effective and reliable.

2018 to 2030


Industry Dedicated industrial development.

65M EUR

MS National programmes 77M EUR

(OceanERA-Net Co-fund) Included in Action 1.1

EU H2020 projects (multiple) 80M EUR

EU, MS National funding programmes (incl. public & private contributions) combined in bi- or multilateral projects.

Figures included above

Regions Dedicated regional support Included in national programs.


UK, 10/10/2017 DM 23/02/2018

Action 1.4 Wave energy system demonstration and deployment TRL 7-9


35

Title: Wave energy – device and array system demonstration at large scale device and early demonstration array scale and leading onto large scale deployment (TRL 7-9).



Scope: Support the demonstration of early wave energy demonstration arrays in real environments with transfer of

knowledge across the sector and from other sectors and between Member States, Industry and academia.

Description: Support for early demonstration arrays will enable further innovation and learning to increase reliability

and performance and reduce costs and risk. This will be necessary to address the challenges of interconnection, mooring, resource and device interactions between multiple devices. This will be an important demonstration of the long-term potential of wave energy. Strong support from the EU and MS will help bring the technology through to market. Facilitation of greater levels of knowledge transfer to increase cross-sector collaboration.

This action include the development of novel materials and innovative manufacturing process for wave energy converters, from the prime mover to moorings and electrical components. Innovation in the materials employed for wave energy is expected to provide a step-change in increasing the reliability of energy converters and reduce their cost-effectivness.

Supporting different wave energy demonstration arrays is expected to showcase the vast potential that wave energy offers in providing clean, reliable and vast electricity in Europe and globally, and in supporting the transition to low carbon energy in Europe. The commercial proposition of wave energy will be reinforced through the successful operation of first-of-a-king wave energy farms. The expected outcome is the development of commercially viable wave energy technology.

TRL: 7-9

Total budget required: 335M EUR


Demonstrated technologies ready for

commercialisation.

Implementation of up to four array projects

Large scale deployments

2018 to 2030


Industry Dedicated industrial development.

122.5M EUR

MS and REGIONS Enhance support for research development testing and deployment of wave and tidal energy devices

105.5M EUR

MS National funding programmes (incl. public & private contributions) combined in bi- or multilateral projects.

Included above

EU H2020 projects (multiple) EIB, EUROFIN

107M EUR

Regions Dedicated regional support Included above


UK, IE, TWG 10/10/2017 DM 23/02/2018

36

37

Action 1.5 Installation, logistics and infrastructure


Title: Installation, logistics and testing infrastructure as well as supply chain development for the wave and tidal sectors

Targets: Reduction of LCOE for tidal and wave energy to 10 cEUR/kWh by 2030/2035

Monitoring mechanism: MS and regions to complete an annual register of projects funded and an infrastructure and supply chain gap analysis as each sector is emerging.

Scope: Enabling better installation, logistics and infrastructure to facilitate the development of the wave and tidal

sector with transfer of knowledge across the sector and from other sectors and between Member States, Industry and

academia.

Description: Installation and logistics - A dedicated installation and O&M supply chain for ocean energy will optimise

processes and reduce project costs considerably. Specialist and dedicated vessels are required. Developing best practice

procedures for installation, operations and maintenance using the experience from the offshore wind sector and to share

knowledge and experience across the industry will drive cost reductions. Support for innovation in this area is required

with design tools required to help address generic array and inter-array related issues.

Infrastructure – Across Europe, the wave and tidal energy resource is often strongest in areas where grid, port and

harbour infrastructures are weakest. Technical and non-technological policy related measures will need to be developed

at a project level and energy systems level to address this.

Test facilities and laboratories are also key enablers to allow innovation to happen. Ensuring there is good access to

offshore and onshore testing facilities across Europe that meets the needs of developers requires continued support.

Channelling financial assistance towards building a stronger, more accessible network of European testing facilities will

provide much-needed support for developers at all TRLs.

In addition, establishing consistent consenting, environmental and socio-economic assessment baseline frameworks is

required.



Infrastructure developed to support the Wave and

tidal industries

2018 – 2030

Supply chain development 2018 - 2030

Party / Parties

Implementation instruments Indicative financing contribution

Industry OEE Supply chain development 30M EUR

INTERREG - Infrastructure FORESEA

Provision access to North-West Europe’s world-leading network of test centres.

Included Below

H2020 - Infrastructure MARINERGI Marine Renewable Energy Research Infrastructure

Research Infrastructure Included below

MS National funding programmes (incl. public & private contributions) combined in bi- or multilateral projects.

35M EUR

EU and Regions Dedicated regional support 35M EUR Structural funds are proposed by Regional Authorities. Regions (e.g Basque, Scotland) are already supporting developments.

38


UK, IE 10/10/2017 DM 23/02/2018

39

Action 1.6 Standards and guidelines for evaluation of wave energy

technologies.


Title: Development of stage gate metrics (technical standards and guidelines) for wave technology evaluation.


Monitoring mechanism: Stage gate metrics implemented by

MS as industry measurement standards.

Scope: Supporting the development of emerging wave energy technology through the adoption EU-wide stage-gate

metrics system.

Description: Stage gate metrics will be the core part of a standards and guidelines framework for the evaluation of a

technologies performance and other key parameters. This system will be applicable across Actions 1.1-1.6 and other

wave related R&D activity in MS.

Stage gate metrics are essential to have an objective and comparable way of assessing and selecting technologies in

funding programmes across Europe. This will increase the quality of decision making, increase consistency and allow

programmes to be more interoperable by using the same underpinning systems of assessment and development control.

A stage-gate process determines steps in the testing and development of sub-systems and prototype devices setting

clear performance indicators that need to be met before moving from one step to the next. The indicators should cover

the full range of technical success criteria that need to be met to deliver valid technology: performance in power

generation, availability, survivability, affordability, installability, and so forth. The indicators will be built upon existing

industry standards and will be defined for sub-systems and devices in wave and tidal energy and also vary with the

stage of development (TRL).

Using a widely established stage gate process will increase the likelihood of success. This will therefore, reduce investors’

perception of technology risk and make the process of development more transparent and understandable also

increasing investor confidence.

TRL: Advanced research /Industrial research & demonstration -> TRL 1-9

Total budget required: 6.5M EUR


Definition and implementation of EU-wide agreed

stage-gate metrics for Wave energy

07/2018 – 12/2019

Party / Parties


EU, MS National funding programmes

(incl. public & private

contributions)

Included in national programs.

MS 3.6M EUR

EU 2.6M EUR

²


TWG 23/02/2018 DM 23/02/2018

40

SECTION 2 - FINANCE ACTIONS

Action 2.1 Creation of an investment fund for ocean energy farms


Title: Creation of an investment support fund for ocean energy farms: EU and National Authorities

should create a fund providing flexible capital, and enabling further private capital to be leveraged

Targets: Facilitating access to investment finance for ocean energy technology development.

Monitoring mechanism: Half year reporting to monitoring group presenting progress in setting up the facility

Description: Ocean energy projects are inherently innovative and, in the current state of development, often first-of-a-kind. Uncertainties in installation times, maintenance patterns or average electricity production imply a significant level of technical and, thus, financial risk, preventing project developers from accessing debt from commercial banks and private equity.

For the industry to go forward public support is required to take on some of those risks that operators alone cannot carry nor insure, and stimulate participation of private financiers. Furthermore, different projects will have different financing needs as developers don’t have the same access to own or private investment and national/EU support. A Fund with the flexibility to either provide directly, or help source elsewhere, different types of finance (debt, equity, grant, etc) will be able to cater for the needs of more projects and, thus, be more successful at pushing the industry towards commercialisation. It will also ensure the best possible use for public finance by avoiding pure grant funding where a repayable instrument can be used.

This action will have two stages: 1) Feasibility study on the creation of a Common Investment Support Fund 2) Creation of a Common Investment Support Fund

If the feasibility study doesn’t have a positive outcome, other ways of support to ocean energy technology developers in finding financial support for their projects should be explored.

TRL: Industrial research & demonstration / Innovation & market uptake. Starting at TRL 7 to TRL9

Total budget required: 200-300M EUR of private/public investment funding (this is to be outside of contributions from EU and MS which are in actions 1.1 to 1.6 which totals almost 800M EUR)


Analysis to determine finance requirements for each sectors

July 2019

Fund for financing single demonstration/pre-commercial projects.

Access to private and public resources

Blending of grants, equity, debt

Due diligence from recognised body

EU and MS Funds to start in 2019 and are included in 1.1 -1.6

Risk – reduction -> Information on AEP, installation and O&Ms to be provided for assessment of risk by insurers

Providing warranties and performance warranties

Linking stage-gate development processes (previous action) with funding decision

Maintaining grants for early TRL technologies

Establishing long term revenue support

Party / Parties (countries / stakeholders / EU)


41

Each R&I Activity might be implemented by one or more groups of parties working together. One line should be filled in per group of parties

… Member States budgets, national revenue from the Emission Trading System, EU structural funds, EU demonstration programmes such as ERA-Net co-fund, Innovation Fund, European Fund for Strategic Investments.


UK, IE? 23/02/2018 DM 23/02/2018

42

Action 2.2 Creation of an EU insurance and guarantee fund to underwrite

various project risks.


Title: Creation of an EU Insurance and Guarantee Fund to underwrite various project risks: This would be targeted at the first ocean energy projects to cover technology risks such as

availability, performance, failures, etc. A common reserve fund available to multiple projects in

the initial farm or plant roll-out, to spread the risk and reduce the cost of providing guarantees.

Targets: Facilitating access to finance for ocean energy technology development.

Monitoring mechanism: Half year reporting to monitoring

group presenting progress in setting up the facility.

Description: Because of their innovative nature, ocean energies bear a higher technological and, thus, financial risk than

more mature energy technologies. As with all early stage technologies, it is difficult to predict electricity production accurately enough to guarantee financial returns. Equally, assessing how often operations at sea, which have significant impacts on costs, are required, can only be achieved by installing more ocean energy devices and farms and gathering data from the projects. At current stages of deployment, such data is lacking, resulting in a paradoxical situation where reducing risks will only come from taking risks.

At project level, this risk is currently overwhelmingly borne by the project developers, both limiting their pool of potential equity finance and making it difficult to leverage their funds to access commercial project finance. Project developers could attempt to cover risks, either by asking the device manufacturer to shoulder some himself, which he might do to a certain extent, or by insuring them on the market. Yet solutions for innovative technologies are only offered as technology matures as insurers equally require an idea of the risks to estimate insurance premiums. Currently no insurance product exists for ocean energy covering risks adequately, at a reasonable price.

In the set-up of a EU Insurance and Guarantee Fund the State Aid rules should be assessed.

This action will have two stages: 1) Feasibility study on the creation of an EU Insurance and Guarantee Fund Fund 2) Creation of an EU Insurance and Guarantee Fund

If the feasibility study doesn’t have a positive outcome, other ways of support to ocean energy technology developers in setting up their projects have to be considered.

TRL: Industrial research & demonstration / Innovation & market uptake. TRL 8 to 9

Total budget required: 50-70M EUR of public or private insurance funds – Outside of the 800M EUR from MS Regions and EU in actions 1.1 - 1.6.

Expected deliverables Timeline:

Feasibility study 2019

Design option for EU Insurance fund 2019

Launch of the fund 2020 - up to 5 years duration for each OE technology family



43

Each R&I Activity might be implemented by one or more groups of parties working together. One line should be filled in per group of parties

… Such a budget could be made available from various sources such as: National (Green) Investment Banks, EIB, Member States budgets, national revenue from the Emission Trading System, European Fund for Strategic Investments. EIB programmes such as NER300, InnovFin EDP, or EFSI.


TWG 19/10/2017 DM 23/02/2018

44

Action 2.3 Wave Energy Europe Pre Commercial Procurement (PCP) action

for development of wave energy technology.


Title: Wave Energy Europe Pre Commercial Procurement (PCP) action for development of wave

energy technology.


Monitoring mechanism: Annual progress reports

Scope: Driving the development and the convergence of emerging wave energy technology to full device stage through

the adoption of an EU-wide innovation programme.

Description: Wave Energy Europe (WEE) will drive the search for innovative solutions to the technical challenges facing

the wave energy sector up to TRL8. Through a competitive procurement programme key sub-systems, systems and

devices, as identified requiring support in Actions 1.3, will be selected and given up to 100% funding support to progress.

Development is carefully managed and controlled using the stage gate metrics system (Action 1.7). The ultimate aim is

to produce reliable technology which will result in cost effective wave energy generation.

The WEE programme approach requires a dedicated, informed and capable organisation and team to operate the

programme. Sufficient technical expertise to be able to specify what is required, assess applications against key metrics,

select best projects, manage project delivery and integrate solutions is a vital.

WEE will build on the model and experience within the Wave Energy Scotland programme (WES), which uses European

Pre-Commercial Procurement (PCP), provides a clear demonstration of a potential delivery model. WES has

demonstrated that it can stimulate significant innovation activity and attract interest from out with the marine energy

sector leading to good examples of technology transfer from more mature sectors. In addition such a concentrated and

focussed programme has led to high levels of collaboration and partnership between organisations across Europe and

has led to greater levels of innovation and progress. Specific technology specialists have the opportunity to focus on

what they are good at and others specialists can provide other solutions leading a stronger overall WEC solution.

TRL: Advanced research /Industrial research & demonstration -> TRL 1-8

Total budget required: 24M EUR (including programme management costs, R&D budget covered in action 1.3)


01/2018 – 12/2019

Portfolio of stage 1, 2, 3 projects awarded, and

progressed to stage 4 in participating MS

01/2019 to 12/2024

Party / Parties EU, IE, UK countries already involved


EU, MS National funding programmes

(incl. public & private

contributions) combined in bi-

or multilateral projects.

Included in national programs.

18M EUR from MS

6M EUR EC Contribution


TWG 23/02/2018 DM 23/02/2018

45

SECTION 3 – ENVIRONMENT ACTIONS

Action 3.1 Development of certification and standards to support the

offshore renewable technology sector.


Title: Development of certification and standards to support offshore renewable technology development.

Targets:

Action 1 – To develop common environmental and safety standards for the ocean energy sector as it evolved

DOI - Reduction of LCOE cost for wave and tidal energy technologies.

Monitoring mechanism: Co-ordinated through the central standards authorities and Standards committees

Scope: Reduce risks for investors by building on existing standards and guidelines to create consensus on testing requirements

Description: Bespoke standards and certification practices are required for ocean energy to progress towards industrial roll-out. Equipment and methods developed as well as information and data gathered during the phases leading up to industrial roll-out is fundamental to moving the standardisation process forward; project developers and investors need to have guarantees on machine reliability. Building on existing work, such as the standards developed by the International Electrotechnical Commission (IEC) Technology Committee (TC) 114 Marine Energy, the industry needs to develop and share guidelines on optimal device operation and farm lay-out requirements. This is an essential step towards the development of industry-wide standards permitting the certification of ocean energy devices, that are an important support to financial institutions when judging project risks and making investment decisions.

TRL: 7-9



1) A set of relevant environmental standards for the ocean energy sector

2018-2025

2) Common safety standards for deployment and operation of ocean energy technologies

2018-2025

3) Best Practices Description of the approaches required for securing delivery of site specific planning and monitoring, including:

pre-application, including site characterisation requirements and public consultation;

application stage, presentation techniques of impact assessment methods, appropriate mitigation measures;

post-consent and monitoring with review and

release of data and analysis to inform future

projects

2018-2025

Party / Parties

(countries / stakeholders / EU)


46

European Commission – DG Mare

Studies on Environmental Monitoring of wave and tidal device

Up to 1,500,000 EUR

European Commission- DG Mare EMODnet Database

TWG MS to take role 4) Socio Economics 200-250k EUR

TWG MS to take role 5) Demonstration Strategy 600-750k EUR

Ongoing R&I Activities (Flagship activities or not): relevant to this new activity proposal

Name Description Timeline Location/Party Budget

SI Ocean / SOWFIA / Ricore / MUSES

EU Funded projects addressing licensing consenting and environmental monitoring of ocean energy technologies. Review of consenting and licensing in MS is presented

2011 -ongoing

Europe 8M EUR (total)

EMODNet DG Mare/JRC database on marine data. Offers a platform for collecting/sharing data

Ongoing Europe

OES – ANNEX IV International database of environmental monitoring report from ocean energy deployments. Participating MS in OES collaborate with Annex IV

2017 Global TBD

OES – ANNEX XY New action to be launched on addressing socio-economic aspects

2018 Global

Gaps:

Uncertainties with regards to environmental monitoring and licensing/consenting process

Uncertainties in regulations in different regions/MS


TWG 23/02/2018 DM 23/02/2018

47

Action 3.2 De-risking environmental consenting through an integrated

programme of measures


Title: De-risking environmental consenting through an integrated programme of measures

Targets:

Action 1 – Leadership in ocean renewable energy

deployment (facilitating installation of ocean energy projects) DOI - Reduction of LCOE cost for wave and tidal energy technologies.

Monitoring mechanism: Monitored through the MS implementation of the Marine Strategy Directive and local planning permitting procedures in MS.

Scope: Addressing non-technological issues of ocean energy technology through a number of projects aimed at removing uncertainties with regards to environmental and socio-economic effect aiming at assisting developers and authorities in the licensing and consenting process of ocean energy projects.

Description: A number of challenges relating to Environment and Consenting affect the ocean energy sector, including:

lack of planning advice/tools to aid developers select sites, including statutory and or spatial policy support;

lack of clarity and efficiency within consenting/licensing processes, including the need for risk based

processes;

need for improvements to the licensing process to aid new developers / first time users with limited

understanding of the licencing process;

requirement to develop science to underpin project consent applications and a single database portal to

share research and monitoring reporting;

need for identification of socio-economic benefit potential for communities, regions and Member States

hosting development, and the EU, to maintain political support and public backing;

need for socialised empirical data collection and analysis of micro, meso and macro marine wildlife

interaction with ocean energy development; particularly around single devices and first arrays.

Addressing the aforementioned gaps will facilitate the streamlining of consenting for ocean energy projects at EU/MS level, and encourage a common attitude towards permitting and licensing. This action is divided in five main parts that will address different non-technological areas: planning, consenting and environmental monitoring. The aim of the work is to provide developers and consenting/licensing authorities a number of guiding documents to facilitate and streamline the procedures to test and operate ocean energy farms in line with current environmental legislations.

TRL: Innovation & market uptake. TRL 7-9

Total budget required: 7.2 M EUR


1) Planning Review Develop guidance and recommendations on how to apply spatial planning and assessment to aid the ocean energy sector in selecting sites and ensuring compliance with Directives/Regulations in a proactive manner.

2018-2019

2) Consenting Develop guidance document promoting best practice techniques based on review of consenting and licensing processes.

2019-2020

48

3) Demonstration Strategy Develop an Environmental Demonstration Strategy based on the experience gathered through the monitoring of the first demo arrays. The strategy should use the demo farms for intensive monitoring purposes and minimise the burden on the first mover developers by socialising the costs. It is important that intensive monitoring information is made available to regulators, stakeholders, researchers and other developers as soon as possible to facilitate better informed applications and decision-making. The Strategy must consider different technologies and geographic considerations

2019-2020

4) Research Best Practices Description of the approaches required for securing delivery of site specific planning and monitoring, including:

pre-application, including site characterisation requirements and public consultation;

application stage, presentation techniques of impact assessment methods, appropriate mitigation measures;

post-consent and monitoring with review and

release of data and analysis to inform future

projects

2018-2019

5) Socio Economics Develop an assessment of the socio-economics components associated to ocean energy development reviewing the supply and value chain methods, industry plans, scenario mapping and master planning techniques and tariff and lease award processes to establish the best techniques to benefit developers, communities and the EU. The document will contain data on socio-economic benefits and impacts (Job, turnover, share of GDP).

2018-2019 (first iteration) 2020-2021 (second iteration)



European Commission – DG Mare

Studies on Environmental Monitoring of wave and tidal device

Up to 1,500,000 EUR

European Commission- DG Mare EMODnet Database

TWG MS to take role 1) Planning 200-250k EUR

TWG MS to take role 2)Consenting 200-250k EUR

TWG MS to take role 3) Research 200-250k EUR

TWG MS to take role 4) Socio Economics 200-250k EUR

TWG MS to take role 5) Demonstration Strategy 600-750k EUR

Ongoing R&I Activities (Flagship activities or not): relevant to this new activity proposal

Name Description Timeline Location/Party Budget

49

SI Ocean / SOWFIA / Ricore / MUSES

EU Funded projects addressing licensing consenting and environmental monitoring of ocean energy technologies. Review of consenting and licensing in MS is presented

2011 -ongoing

Europe 4M EUR (total)

EMODNet DG Mare/JRC database on marine data. Offers a platform for collecting/sharing data

Ongoing Europe

OES – ANNEX IV International database of environmental monitoring report from ocean energy deployments. Participating MS in OES collaborate with Annex IV

2017 Global TBD

OES – ANNEX XY New action to be launched on addressing socio-economic aspects

2018 Global

Gaps:

Uncertainties with regards to environmental monitoring and licensing/consenting process

Uncertainties in regulations in different regions/MS


TWG

50

ANNEX 8 -HIGH LEVEL BREAKDOWN OF FUNDING ESTIMATES

Note – This table presents an initial high level breakdown of the total funding

requirements and these figures are initial estimates and will need to be investigated,

validated and agreed over the life of this Implementation Plan.

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